The workshop at the end of the garden of the house in Claygate belonging to the al-Hilli family (Sky News)

A 200m stretch of road was cordoned off and four properties behind the cordon were evacuated.

Some residents were permitted to stay in certain parts of their homes that did not fall within the area of concern.

Police confirmed that the al-Hillis' large garden shed was among the areas searched.

The cordon was removed and residents were allowed to return home just after 12.15pm. A bomb disposal van from the Royal Logistic Corps was replaced by a large police van outside the property.

A neighbour of the family, Brian Salmon, said police had asked if they could use his front garden "as a place to discuss what's going on."

He said: "They just said that the road was closed but that's as much reassurance as they gave."

The situation was "unnerving" he said, adding: "What happened to these people? Why were they shot?"

A Surrey police spokesman said: "Surrey Police can confirm that items found at an address this morning... in Open Lane, Claygate are not hazerdous.

"The items were found earlier today when a search of the property was extended from the main building to out buildings in the garden.

"A bomb disposal unit was called to the scene to carry out an assessment as a precautionary measure."

She added: "The extension to the cord has now been lifted as residents who were evacuated earlier as a precaution are now being allowed to return to their homes.

"A cordon around the house and gardens will remain in place as a search of the property continues following the death of the four people in southern France."

She had earlier confirmed that a "bomb disposal unit assessment is under way as a precaution at Claygate property" while neighbours were evacuated.

Police outside the home of French shooting victim Saad al-Hilli in Claygate, Surrey (AP)

The dramatic developments came as French police confirmed that the oldest victim of the French Alps shooting was the maternal grandmother of the two girls who survived the attack.

"Evidence gathered in Britain has enabled us to establish that the woman was the maternal grandmother," Annecy prosecutor Eric Maillaud told reporters.

French police are hunting at least two killers who murdered the British family with semi-automatic weapons in an attack in the Alps.

Police surround the BMW at the scene of the shooting in woods near Chevaline in the French Alps (Daily Telegraph)

All four victims were shot twice in the head, while forensic analysis of cartridges found at the scene reportedly suggests they were fired by more than one person.

The findings will fuel speculation that Saad al-Hilli and his wife Iqbal, who were on a caravanning holiday in the region, were victims of a professional hit.

A 74-year-old woman, Mr al-Hilli’s mother-in-law, and a passing cyclist were also killed.

Attention on the property intensified as police in Annecy in France waited to question seven-year-old Zainab al-Hilli, who has regained consciousness following the attack that left her parents dead.

Detectives believe Zanaibi, who survived despite being shot in the shoulder and pistol-whipped around the head, may hold the key to solving the case. She yesterday came out of a medically-induced coma she has been in since Wednesday.

However, she remains heavily sedated and French authorities said she may have suffered brain damage during the attack.

When she recovers the girl's aunt and uncle, who are at her bedside, will have to break the news that her parents and a 74-year-old woman, believed to be her grandmother, have been murdered.

Officers specialised in dealing with child witnesses plan to question her as soon as doctors allow them.

Her four-year-old sister, Zeena, who was found by police hiding under her dead mother's dress eight hours after the shooting, yesterday flew back to Britain with a family liaison officer.

There were unconfirmed reports yesterday suggesting that the bullets were .765 calibre rounds which are typically used in semi-automatic pistols and hunting rifles, suggesting the killings were more than a robbery or carjacking gone wrong.

In Britain, police are still questioning Mr al-Hilli’s brother, Zaid, as a witness.

The questioning comes after claims, which he has denied, that he was involved in a family feud with his younger brother over their father’s legacy.

Firefighters and armed officers were yesterday called to the al-Hill £800,000 family home in Claygate, Surrey. Police insisted the search by armed officers was “routine”, while the fire service declined to comment.

Police remain baffled by the motive for the killings. Lieutenant Colonel Benoit Vinneman, one of the investigating officers, said all lines of inquiry remained open.

“Is this the work of a crazy person? Was the family the real target? Is it possible that it was the cyclist? Only work based on complete information can help us to see things clearly,” he said.

Mr al-Hilli, 50, worked as a mechanical design engineer with the Surrey Satellite Technology firm.

The company helped to develop the TopSat programme for the Ministry of Defence, the UK’s first military surveillance satellite.

However a colleague, Derek Reed, said that he did not think his job would have put Mr al-Hilli at risk. “He would not have had to sign the Official Secrets Act for what he was doing,” he said.

A French builder doing work on a British businessman’s house in the village of Chevaline on the day of the shootings yesterday said he saw the al-Hilli family drive up the hill shortly before they were killed.

Laurent Fillion-Robin, 38, said he noticed the red BMW estate because it had a British number plate. He said he did not hear any gunfire, and speculated that the killers may have used a weapon equipped with a silencer.

"I didn't hear any shooting. You do hear shooting from the hunters some times but I didn't hear anything that afternoon. Perhaps they had a silencer.

"I find it bizarre that the British people were up there (at the car park).

"There is not much up there apart from a few chalets. I just wonder what they were doing up there.

"It is not the sort of place that families with young children or older people would go to unless you know the area."